A Purrfect Development in Smart Contracts
CryptoKitties are digital assets that take on the form of cartoon kittens with diverse and transferrable characteristics. Each cat is technically an Ethereum (ETH) smart contract (non-fungible ERC 721 token) that can be collected, transferred, bred for new kittens, or even destroyed. For the first time, an understandable and compelling representation of blockchain infrastructure has been presented and made accessible to the public in a mainstream way.
Utilizing the kitty marketplace on CryptoKitties.com works in the following way: Individuals use the secure Metamask extension to create an account and purchase any desirable cats on the website. You can then breed your cats together or with cats of other users. This will result in new next generation kitties that will take on a combination of the parents’ explicit or hidden attributes. These cats can then be sold for Ethereum, sent to other kitty collectors, friends, or simply just stored away in your collection.
The CryptoKitties Marketplace
These kitties are much more than a digital form of Beanie Babies. They gamify the way in which individuals can buy and utilize cryptocurrency (in this case ETH). CryptoKitties are also responsible for the time and effort needed to validate contracts, establish blocks, and foster a marketplace for digital art and assets on the blockchain. While the aesthetic may evoke the cuddly collectibles of Ty Inc., the system of production and economy behind CryptoKitties is much more complex and representative of a new class of digital asset (born and bred for the 21st century).
CryptoKitties also offer a very understandable system to teach people how cryptocurrencies are created and circulated. The system produces “Gen 0” cats ever 15 minutes with a variety of unique features. Every time a cat is bought, sold, transferred, bred, or destroyed, a small amount of Ethereum is used to fuel the smart contract and validate part of the next block in the blockchain. All of these actions will be recorded on the Ethereum distributed ledger and made immutable atop a long list of Kitty lineage. Economically, the prices of each of these cats will vary and will remain a highly negotiable (even volatile!) aspect of the process depending on characteristic rarity and generation number.
Setting a Strong Pawsition for the Future of Assets
Since the massive popularity of CryptoKitties in early December, many more people and companies have launched their own crypto-integrated collectible lines and games, both on Ethereum and other blockchains. This form of development has proved a successful way to encourage people to use and enjoy particular tokens and blockchain systems.
Each of these new iterations and ecosystems open up the possibilities of immutable and interact-able digital assets. The biggest challenge with any market today is the need for multiple intermediaries that negotiate price, verify ownership, and handle transactions. Smart contracts eliminate the need for those moderators and can transform the asset market into a peer-to-peer system that even allows asset transactions into (crypto)currency.
Beyond collectible and gamified assets, the success behind CryptoKitties also influences the way the art market will behave in a more decentralized future. Placing a hybrid of physical and digital assets on the blockchain will help deal with systemic issues of authentication, ownership registry, direct payments to creators and owners, and general access.
Interested in getting started breeding and buying a bunch of fancy cats? You can learn more through this FAQ with all the necessary first steps and resources here.
The majority of cat-puns in this article were inspired or sourced directly from the CryptoKitties team.
Cover illustration by @carrotcake